Caesarstone Sdot Yam Ltd. (Nasdaq: CSTE), which manufactures quartz surfaces used in kitchens and bathrooms, yesterday reported its results for the first quarter of 2017. The company outperformed the forecasts, posting $136 million in revenue, up 16.7%, compared with the first quarter of 2016, and ahead of the $125 million forecast. The company's sales rose in almost all regions, except for Europe, where revenue was down 2.8% to $6.4 million. Revenue was up 17.7% to $58 million in the US and 13.8% to $11.7 million in Israel.
GAAP net profit dipped 5.8% to $11.1 million and non-GAAP net profit (excluding various accounting expenses) was down 6.2% to $12.5 million, but this was still higher than what the market expected: $0.36 per share, compared with expectations of $0.29 per share.
Caesarstone attributed the drop in profit to financing expenses, while adjusted EBITDA jumped 5.5% to $24.3 million. The company generated $17.7 million from current activities in the first quarter, and had $121 million in cash as of the end of the first quarter.
"We are satisfied with our accelerated growth in this quarter, said Caesarstone CEO Raanan Zilberman. "We are striving to take advantage of our increased investment in sales and marketing, and of the worldwide brand of Caesarstone, in order to leverage the growth in global demand for quartz solutions. We believe our performance will improve in 2017 in both operations and financial results."
Despite the company's strong first quarter, Caesarstone retained its 2016 forecasts of $580-595 million in revenue and $119-126 million in adjusted EBITDA. In its conference call, company management noted that growth would be more modest in the second quarter in comparison with the second quarter of 2016, which was a strong one. Caesarstone's market cap is $1.5 billion, following a 52.7% rise in its share price since the beginning of the year.
Sodastream International Ltd.'s (Nasdaq: SODA; TASE: SODA) revenue grew 14%, also ahead of the analysts' forecasts. In contrast to Caesarstone, however, the SodaStream share price was down 7%, after climbing 185% over the past year. The company's market cap is $1.1 billion.
SodaStream, which makes home carbonated beverages systems, has focused primarily on carbonated water for the past two years. The company's revenue spurted 14.3% to $115 million in the first quarter, with growth extending to all of the company's geographic regions. Sales of carbonation systems surged 34%, while sales of flavoring materials dipped 2%. Net profit reached $14.7 million, $0.66 per share, compared with $6.1 million in the corresponding quarter last year, and EBITDA totaled $20 million, up 62.9%, compared with the first quarter of 2016.
In its conference call, the company said that it expects revenue to reach $128 million in the second quarter, slightly less than the analysts' forecasts. Cash flow from current activities was $31.5 million, and the company had $94.4 million in cash as of the end of the first quarter.
"We are beginning 2017 with excellent results and double-digit growth in each of our four geographic regions," said SodaStream CEO Daniel Birnbaum. "With the increased demand, we are considering future expansion in various locations in Israel and around the world. We are confident that implementation of our business strategy will produce worldwide expansion, leading to larger profit margins and increasing value for the shareholders in the long term."
Published by Globes [online], Israel Business News - www.globes-online.com - on May 11, 2017
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